Next-gen phones and gadgets to spur economic growth

Semiconductors and microchips will boom through next year based on demand for increasingly powerful wireless tools
Written by Will Knight, Contributor

The worldwide microchip industry will continue to boom for the next two years, in response to the introduction of next generation mobile devices and Internet anywhere technologies, according to a revised forecast from analyst firm Dataquest. This growth will, however, dwindle in 2002 if Dataquest's research proves correct.

The analyst firm is expected to predict that the chip market will grow 36.9 percent this year and 27.5 in 2001 at Gartner Dataquest's Semiconductors 2000 conference, held between 30-31 October in San Diego. This is despite previously suggesting more modest growth of 31.3 and 26.9 percent respectively. Dataquest anticipates that the industry will be worth $231.6bn (£158bn) by 2002.

The research group suggests that the emergence of next-generation hardware and software using semiconductor technology -- in particular future generation Internet phones and mobile computers along with set top boxes and interactive television -- will fuel future growth.

Despite slowing up in 2002, Dataquest says that the semiconductor industry will seen renewed growth in 2004 and will continue to develop from there.

The predicted boost to the market would build upon particularly healthy growth seen this year. In the month of August the global semiconductor grew a record 52.7 percent, according to figures released the Semiconductor Industry Association (SIA) last week.

The new prognosis may help reassure the industry following disappointing third quarter figures from market leading microchip manufacturer Intel, which sparked a general market downturn recently. Apple and Dell have also issued gloomy financial forecasts.

One individual who remains bullish is vice president of Gartner Dataquest's worldwide semiconductor group, Joe Grenier. "Recent stories about Intel's earnings announcement have put a lot of misconceptions out into the market about the semiconductor industry," says Grenier. "Overall, the semiconductor industry is having a great year, and during Semiconductors 2000 we'll explore growth opportunities in the market, with an emphasis on the hot and emerging semiconductor applications."

Senior Gartner Dataquest analyst in the UK Andrew Norwood points out that growth is expected across the entire semiconductor industry, and does not think Intel's woes should been seen as evidence on overall slump. "The microprocessor industry market is continuing to grow," he says. "Intel hasn't executed well and AMD has been firing on all cylinders." Norwood says that the success of flash memory has spurred on the market in recent months.

Dataquest's prediction should also provide some comfort in light of the hardware shortfall currently troubling some electrical suppliers.

More detailed analysis of the future of the semiconductor industry will be released at that Semiconductors 2000 conference.

See Chips Central for daily hardware news, including interactive roadmaps for AMD, Intel and Transmeta.

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